Methods for the preparation of cell fractions from homogenates of the posterior pituitary glands of rabbits are described. By controlling the speed of centrifugation it was possible to isolate 80% of the oxytocin and vasopressin in a sedimentable form and about half of the total hormones or two-thirds of the sedimentable hormones in a single fraction. Electron microscopy of this fraction showed that it was composed mainly of membrane-bounded granules about 1300 angstrom in diameter. Similar granules were found in the neural swellings of the rabbit neurohypophysis studied by electron microscopy. The possibility that vasopressin and oxytocin are stored in different granules is discussed.